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Monday, February 22, 2016

The (Rita) Kids Are Not Alright

Our friends at Anheuser-Busch continue to face serious challenges, despite their ongoing efforts to co-opt craft beer by buying up breweries and distributors. It turns out the Rita family of brands, expected to be a big hit with young drinkers when initially launched in 2012, is a lemon.

Not that anyone in the craft beer crowd would drink this snot, but it does provide an interesting, entertaining look at how lousy products are handled in the board rooms of big beer.

Lima-A-Rita was the first of the Rita brands and the most popular of the bunch. It did okay out of the gate, then nosedived to less than half of its peak sales numbers by 2015.

Reports say the Rita family, which includes several flavor variations released after Lime-A-Rita, declined by 25 percent last year. That downward momentum continued into January 2016, according to IRI data. We're talking about a fairly dysfunctional family.

Of course, the folks at AB are sure the Rita family is fine...doesn't even need counseling. All it needs is a restart, supported by a well-funded advertising campaign. It's already underway, with an ad that aired during the Grammy's. There's much more to come. AB is going to drop some serious coin on the campaign because, quite frankly, it can.

They will also release a flurry of new variants in 2016. Sensing the (8%) ABV may have been a little steep in the first wave, the new "Splash" Rita's will be in the 4% range. Lime-A-Rita and Straw-Ber-Rita are coming in March, and Water-Melon-Rita will drop during the summer. Some markets will evidently get additional flavors during the year. That's a promise, not a threat.

You might think the Rita family is competing with craft beer. But fruit flavored drinks like this largely transcend craft beer. Products in this segment tend to briefly appeal to consumers based on newness, then flame out quickly. That seems to be what's happening with the Ritas. Increased competition from a barrage of hard sodas will make things worse.

Sometimes you've got to know your limits, realize you're stuck with a losing hand in a competitive game. Sometimes you need to let go. But the folks at Anheuser-Busch don't live by those rules. Why? Because they've got wads of cash to spend on crackpot marketing schemes designed to prop up failing brands that have limited, declining appeal.